Wheat Weekly Comments July 5

Wheat Weekly Comments July 5

Wheat closed higher across the board on Monday with all three exchanges seeing double-digit gains. Hot and dry conditions in the Black Sea region supported the wheat markets as traders believe more cuts will need to be made to Russia’s production. Technical buying added to the gains. Last week’s export shipments were at the low end of trade expectations. After 4 weeks, marketing year to date shipments are at 50 MB vs. 41 MB last year. Spring wheat conditions increased 2% to 72% g/e. That was 2% higher than expected. Saudi Arabia bought 8.6 MB of hard wheat from optional origins for Sept/Oct shipment.

On Tuesday wheat opened the overnight session lower and proceeded to extend session losses throughout the night. Early selling was tied to Monday afternoon’s slight negative Crop Progress report. The report showed only slight changes in wheat’s crop rating, which surprised the trade and resulted in a bit of a pullback. Selling picked up steam once the day session got under due to selling tied to reports that SovEcon has raised their wheat production estimate for Russia, now estimated at 84.1 MMT vs 80.7 MMT previously. Forecasts for favorable harvest weather continue to put pressure on wheat as well. Harvest is estimated at 54% complete. Seasonally wheat is due for a bit of a dead cat bounce. Losses were kept in check by forecasts calling for hot and dry conditions for the Black Sea region.

In Wednesday’s session the wheat markets saw gains overnight but fell lower in the day session to erase those gains and closed lower. Wheat was under pressure from reports of better-than-expected yields in Russia. Sovecon increased their production estimate by 4.0 MMT to 84.1 MMT. Reports of good yields for the US HRW wheat crop added pressure. Census data reported wheat exports for May at 58.4 MB, a 3-year high for the month. 2023/24 marketing year total exports were 715 MB, just shy of USDA’s target of 720 MB. Japan is tendering for 130,000 MT of wheat sourced from Australia, Canada, and the US.

For the week, Sept MW was at $6.3325 up 20.25 cents, Dec Mpls was at $6.51 up 18.5 cents, Sept Chicago was at $5.905 up 17.0 cents, Sept KC was at $5.99 up 12.75 cents.